Buy Kotak Mahindra Bank; target of Rs 2500: Sharekhan

Sharekhan's research report on Kotak Mahindra Bank

Core PPoP was weak (up just ~2% y-o-y) besides higher provisions on investment book led to weak net earnings in Q4FY25 (below estimates). Core credit cost stood marginally lower at 64 bps annualised versusversus 68 bps q-o-q. Weak NII, higher opex growth was partially offset by higher fee and other income. Higher other income has aided profitability on a q-o-q basis. Asset quality improved, led by contained slippages and higher write-offs. Loan / deposit growth was modest at 13.5% y-o-y/11.2% y-o-y respectively. The bank is confident of a growth rebound in FY26E.

Outlook

We acknowledge that core operating profitability would be slight lower in FY26E led by lower NIMs, but we believe that balance sheet growth /profitability is expected to be better than peers. Thus, we maintain a Buy rating with an unchanged SOTP-based PT of Rs. 2,500. The stock trades at 2.2x/2.0x its FY2026E/FY2027E core BV estimates.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Kotak Mahindra Bank - 06052025 - khan